NAIROBI, Kenya May 20 – Telkom Kenya has defended its move to review commissions paid to its dealers as pressure continues to mount from a cross section of its dealers.
Telkom Chief Executive Dominique Saint Jean said at a press conference on Wednesday, the move was purely a way of making business sense and reinstate fairness in the way the company paid dealers for different products under its offering.
“Contrary to the belief that we are trying to cut costs, the new plan will make more business sense to us and at the same time improve our distribution chain,” he explained.
Mr St Jean also stressed the plan would stay in place and dealers would be required to sign new contracts if they were to continue trading under the company’s name.
The new plan will see dealers get paid commissions three months after selling sim cards and only if the card has been active during that period.
It is also expected to improve the distribution channel, and is expected to enable dealers earn better commissions, when they sell products with bigger value like a Sh1,000 airtime card that attracts a commission of 17 percent.
But a cross section of dealers threatened to decamp and join rival companies if the decision is not rescinded.
Mr St Jean was speaking while announcing that Telkom Kenya’s GSM service, Orange Mobile, has now reached the target of one million subscribers within just eight months of launching, an achievement he was particularly proud of.
“The success we’re celebrating today is not accidental. It has been hard won. Thanks to the unceasing commitment and incredible energy of our employees, the loyalty of our customers, the support from our suppliers.”
“So I’d like to say that today is not about Telkom Kenya, it is about all of you, the people who have played such a valuable role in our shared journey to our first million customers.”
Telkom Kenya came into the market in September 2008 and since then there has been urgency by mobile companies to control the vast mobile telephony sector. There are currently four mobile service operators with Yu being the latest.